6) If there is an increase in net taxes, Keynesian theory indicates that consumption will ____ and thus 6) shift the IS curve _____, other things equal.

A) decrease, left B) decrease; right C) increase; left D) increase; right

7) The LM curve slopes upward because

A) as income increases, money demand rises, which increases interest rates.

B) as interest rates rise, the money supply rises, increasing output.

C) as interest rates rise, planned investment must fall, increasing output.

D) as income rises, savings rise, increasing output.

8) Interest rates and bond prices are ______ related; as such an increase in interest rates will lead to a 8) ______ on bond holdings.

A) inversely; capital gain B) positively; capital gain C) inversely; capital loss D) not; capital loss

9) In the liquidity preference model, a monetary expansion causes _______ to ________.

A) interest rates; decrease B) interest rates; rise C) money demand; decrease D) the money supply; decrease

10) In the IS/LM model, an increase in autonomous investment will cause interest rates to ___ and output to _____

A) increase; decrease B) increase; increase C) decrease; increase D) decrease; decreas

6} If there is an increase in net taxes, Keynesian theory indicates that consmnption will _ and thus 6) shift the IS curve . other things equal. A} decrease, left B) decrease; right C) increase; left D) increase; right 7} The LM curve slopes upward because 9') A} as income increases, money demand rises, which increases interest rates. B} as interest rates rise, the money supply rises, increasing output. C] as interest rates rise, planned investment must fall, increasing output. D} as income rises, savings rise, increasing output. 1 3} Interest rates and bond prices are related; as such an increase in interest rates will lead to a B) on bond holdings. A} inversely; capital gain B) positively; capital gain C] inversely; capital loss D) not; capital loss 9} In the liquidity preference model. a monetary expansion causes to . 9) A} interest rates; decrease B) interest rates; rise C] money demand; decrease D) the money supply; decrease 10) 111 the 1511M model, an increase in autonomous investment will cause interest rates to _ and 10) output to A} increase; decrease B) mcrease; increase C] decrease; increase D] decrease; decrease